Craig Pfister has cut the cord. Pfister, vice president of First Equity Financial Services, no longer has a home phone connected to the wall. He makes all his calls, business and personal, from his Verizon Wireless phone. Pfister is one of a growing number of phone customers who have found that they can handle all their telephone needs with a wireless phone. According to figures compiled by the Cellular Telecommunications and Internet Association (CTIA), a Washington-based trade group, about 2.2 percent of people in the United States have cut the cord on their regular phone service and use only cell phones or other wireless devices. A recent study by IDC research showed that by year end 2001, 10 million access lines were displaced by wireless, primarily by customers who chose wireless over having an additional wireline phone at home. The trend is expected to accelerate even more this year, with another 10 million wireline lines replaced by wireless by 2005. The study suggested that falling wireless prices, more bundling of long-distance in wireless calling plans, and improved wireless networks will contribute to the acceleration. “There are a bunch of reasons,” Pfister said. “It is quite expensive for even a normal hookup with wired phones. Then with long distance, you have two bills; then, you are spending probably $50 or more on an answering machine, then more money on a phone, $100-to-$400 for a good cordless. That is a lot of money in hardware. And it seems like you’re always paying phone bills. “And then, you can’t take it anywhere,” he added. “I can go anywhere in Pennsylvania. Like most cell phones, I have answering machine, call waiting in the same plan. My phone is $99; that includes all the minutes I ever need,” said Pfister, who said he averages 2,200 minutes per month. “Yes, it is growing, but there are two ways to look at it,” said Becky Diercks, director of wireless research for market analyst Cahners In-Stat Group. “You have some people, no more than 2 percent of all wireless users, that have completely replaced their wireline phone with wireless. That is a fairly small group, and it is growing, but not exponentially. “Those in the second group are using it to replace a second phone line,” said Diercks. “That is the larger group,” and she said it is definitely growing and also more difficult to count. But enough of those customers are cutting the cord that it is drawing the attention of the wireline phone companies. “From our perspective, Verizon looks at it as just another form of competition,” said Lee Gierczynski, spokesman for Verizon Communications, the dominant wireline phone company in the area, controlling 90 percent of the home phones in the state. “It is not just the competitive local phone companies, of which there are many, but the wireless companies, even Verizon Wireless, are competitors, too. “What we’re approaching is technology competition,” said Gierczynski, noting that wireless, digital and even Internet technologies can take people away from using wireline as their primary phone. Gierczynski said that Verizon not only feels the revenue loss from the unplugging of the phone, but also with the loss of other services – voice mail, three-way calling, call waiting – attached to that phone. “It is forcing telephone companies to start looking at their customer’s needs to try to find other ways to serve them,” he said. “I think that wireline carriers are definitely concerned. Their feelers are up, to see how much it grows,” said Diercks. One of the drawbacks to completely unplugging is that wired phone lines are still the chief way of connecting to the Internet. So far, you cannot use wireless phones to connect home desktop computers to the Net. Most wireless phone services offer some Internet access, with e-mail and some limited browsing, and they have capability of connecting to laptop computers for Internet access. “As for the wireless services that provide wireless access to the Internet, you have to understand that it is not the same as a computer browser,” said Diercks. “It is meant for more limited capabilities. You have instant messaging, and you get the e-mail experience, but it isn’t the same. It is difficult to actually read entire e-mail messages, especially if there are attachments. It is not duplicating the desk computer at all. “That’s because many of those people use wireline phones to hook up to the Internet and to get other phone services,” she said. A number of companies, notably Leap Inc.’s Cricket and VoiceStream, are sprouting up to handle just that kind of business. The most ubiquitous locally is 3-year-old Cricket, which entered the Pittsburgh market June 14 and has flooded the market with ads starring its green “comfortable” couch and the $32.95 flat monthly fee for unlimited calls. “We want people to think of our service as a cordless phone that you can take with you,” said Scott Jones, Cricket’s general manager, who won’t divulge how many customers Cricket has in the area. Cricket celebrated its 1-millionth national customer here in December, and Pittsburgh is the regional headquarters for the company. He said the company’s aim has always been to unplug phone customers from the wall. “I think every wireless carrier’s objective is to get people to replace their home phone,” said Jones, who oversees 120 Cricket workers in Pittsburgh. “Our research shows that our customers are almost seven times more likely to abandon their home phone,” he said, compared to 4 percent for PCS phone users and 2 percent for cellular. Jones said the key to Cricket has been the philosophy of staying local in its approach. Cricket has concentrated on smaller and midsize markets: Syracuse and Dayton in addition to Pittsburgh. “Most of our users only use their phone for local calls. We’re actually targeting people who we consider would want to stay local: seniors, busy moms taking their kids to soccer practice, teens. These are people who have a need for the flexibility of a wireless phone,” he said. “I think the popularity is increasing,” Jones added. “They are more and more popular with the teens and college students, who are very mobile. Instead of getting a dorm phone, they are getting a Cricket.” Cricket customer Chad Kurzdorfer disconnected his home phone two months ago. “It’s been a lot easier,” he said. “It’s way too convenient. Now I have a home phone on my belt.” He said that he doesn’t miss the wired phone service. “There were always hidden charges, and charges showing up on the bill that were shaky and questionable. I’d ask them questions and not get answers.” VoiceStream Wireless, with Jamie Lee Curtis hawking its phones in ads, claims 6 million customers nationwide. “Our entire business strategy has been built around the philosophy of ‘get more for your money,'” said VoiceStream spokeswoman Kim Thompson. “What we’re seeing now is that the rates have come down so much, because of the increased competition. Our customers are saying that the best thing is that now they don’t get calls from telemarketers (since wireless phone numbers aren’t in phone directories). Dinners don’t get interrupted.” The traditional phone companies realize that some of their customers are unplugging. Verizon, the area’s dominant wired phone company, isn’t complaining, since it also sells wireless coverage. “Basically, many of our new plans have large buckets of minutes,” said Verizon Wireless spokeswoman Christy Sebastian. “We’re generally finding it is single, pretty successful people in their early 30s.” “You don’t see Sprint or AT&T or Verizon pushing those kinds of (one price for unlimited usage) plans, because they already have a very large customer base,” said Diercks. “What you’re seeing is VoiceStream trying to aggressively grab a piece of the market.” But Diercks added that there is a limit to how many customers can actually unplug their home phones, because the wireless companies won’t be able to service them all. “They really don’t have enough capacity to handle a lot of people switching,” she said. “The networks will have to change, and the carriers will have to spend more money to build out the system. If they don’t, then you start experiencing more problems with quality. That’s why most of the companies are not promoting that kind of service.” “Why throw reality into it,” laughed VoiceStream’s Thompson. “Yes, at some point we can’t handle that much capacity,” she admitted. But she said the volume of customers will allow VoiceStream to have the income to expand its coverage areas.

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